Series examining the forces shaping the driving global commodities markets today. OPEC and it’s not OPEC partners agreed to maintain what’s become the status. Holding back output until March twenty-eighth to manage the supply side of the oil market. On the face of it, the group appears to have done everything it could and yet prices there’s a tumble Why did they fall?

As many have said it’s a case of buy the rumors sell the news still doubts clearly remain. How long is the coalition expected to hold firm to this commitment? And this commitment enough considering the bare state of the current spot oil market. Last month many in the market were caught out in crude prices fell sharply, the consensus view at that time was to give OPEC a chance to let supply cuts work their way through the market and yet prices still fell.

They did rebound to the delight of many but that long-awaited rally and rebalancing remain elusive. At the end of April global refined products were bloated and they’ve come up slightly since then the drop appears to be Morse something more seasonal as opposed to this long-awaited structural rebalancing that bulls are hoping for.

There is structural tightening relative to seasonality but is it enough? and lead if there’s a sharp drop it’s important to look at what hasn’t changed about the market because many of the very present and bearish details that should have offered caution to those that lost a lot of money in April these details are still with us and they still auger caution. Spreads like the Brant to buy exchanges futures for swaps are there to buy spread are still narrow and global freight rates are still cheap. This means there are very few constraints in place for venting crew from the US, the North Sea, Latin American, West Africa from displacing to Asia the very barrels OPEC and company are sensibly cutting.

And even though products stocks are tighter they’re still well supplied that can be seen by looking at many S. And P. Global plats spot differentials from Singapore gasoline, jet and gas oil to air a little less the barges. None of these prices are showing much upside. Part of the problems that global refining margins are still strong and if refiners continue to be as profitable as they have been there’s no end in sight to the volume refined products are going to produce.